10th February 2019
Reading Time: 5 minutes
I recently read a blog post from a company regarding ‘Made in China’. Usually such posts come about as a statement responding to people’s reactions, good or bad, to what you are doing. I’ve done them myself over the years, so I can sniff one out when I see it. Well written and equally well reasoned, ultimately it’s a defense as to why they are (now) having their stuff made in China and probably not somewhere in the EU, as they used to be when they started out.
From a brand positioning point of view, the post is interesting in itself, talking about the quality and standards of the suppliers they use in China, stating that the label ‘made in China’ does not automatically denote rubbish quality. And they are right of course, it does not. Indeed, some very good quality comes out of China though interestingly enough, there usually is an appropriate price tag associated with it because, even in China, good quality costs money. Overall the post explained while many of the products they offer are now made in China, the only option for volume production, the quality is high and the working standards of the workers involved are good and improving.
There is no doubt that once you reach a certain volume and fall into currently accepted distribution models, the facts demand, more often than not, that you must move your production to Asia in order to maintain and grow your margins, i.e. your bottom line. We in the West have been so smart as to put all our eggs in one basket while setting fire to the baskets in our own back yard, so in many ways there is little choice. But ultimately I find the thrust of the argument put forward in the post, that the backlash is about the quality, flawed. My suspicions are that complaints started coming in as customers were under the impression, based on the price tags and ‘brand messaging’, that the product being bought was still being made in the West. I certainly was under that impression myself, until I recently discovered a ‘made in China’ label on one of the products in question. The ‘complaints’ I am guessing, stem from this discovery and the natural assumption that if it’s made in China, should it not be somewhat cheaper, or more to the point, the messaging be a little more clearer?
‘Designed in Australia/USA/Cupertino/London…. Made in China’.
Companies like to gloss things up by using this as the first line on the ‘made in tags’ these days. This subtle tactic has quietly made it about a question of perceived quality, rather than the values of the brand. You know, the ‘Look! Squirrel!’ tactic. Read the first bit, the bit that resonates, and you forget the second bit; because in the mental hierarchy, the first bit cancels out the second.
The core reason to move production to Asia is cost driven. As I noted before quality need not be an issue and in a well managed production system, through a well regarded factory, it’s not. Cost though, is. Simply, making stuff in the West has been more costly than making stuff in the East. The exact amount as to how much more varies, but ultimately it’s more; especially up against the likes of China, where worker’s are paid not very much AND the central government knowingly keeps the currency undervalued so as they have a trade advantage in a supposedly open and fair ‘free trade’ environment. So the core reason to move to a ‘made in China’ scenario is to drop your base costs and ultimately increase your margins. Nothing wrong with that, people know and understand this and to most, the fact that something is made in China is of little concern, as long as it costs less (there’s a whole article on that mentality right there). Where the discerning consumer gets bent out of shape is when they are buying into an ideal and are prepared to pay that little bit extra for doing so, only to find that what they bought is a ‘half truth’.
Brands and products today are more than simply the sum of their parts and a pretty wrapping. For a sector of the market, there is an ingrained ‘ethical’ (for want of a better word) contract they develop with a brand that underpins why they are buying into it. For some it’s the design, or the materials, maybe the provenance, for others it’s a combination of different factors. Regardless, in today’s rampant mass consumer, churn and burn market, there is a growing sector that wants to ‘feel good’ about what they are buying; they are smart, switched on, so pulling the proverbial wool over their eyes is a dangerous game because once you loose their trust, they are gone forever.
Naturally, when you spend time convincing your market they should buy into the philosophy tied to your product but then, slowly, start to offer the same product but with a different ‘proviso’ attached, something has to give. Usually that’s the price. ‘We did it this way and it cost X. We now are doing it that way and it costs X-y. We hope you don’t mind but it IS cheaper’. For some brands that works, the attraction to their product is not so deeply rooted in the story that such a switch would offend their core market. For other brands, it never really mattered to begin with. Mega brands float through changes like this because the customer base is so tied to the brand that they don’t care — Apple anyone? In Apple’s case, their offerings for years were so substantially better than the nearest competitor that its brand design pulled them through — sure I’ll buy that for an inflated price because it is just better — designed in Cupertino but made in China? I don’t give a shit! For a high fashion brand, it’s the well protected prestige factor — ‘Yes, it’s made in China but it is Gucci darlink’.
But some brands win their customer base by virtue of the messages they put in front of them. Such brands appeal to the discerning consumer, the ones that want more than a factory line product spat out of the East; they invest in a brands quality, provenance, materials, history. So if you are not a mega brand, or a brand that has a product people don’t care enough about emotionally, this messaging is vitally important and directly tied to the foundations of the brand itself. ‘Made in Australia’ can not become ‘Made in China’ and still hold the same mantle, especially if you have spent all your time tying what you do to being made in Australia. You might be able to pull it off if you start to charge less for it and change your message accordingly, but keep the same product at the same price with the same message and you’ve got a bit of an issue on your hands. And fair enough too.
And this is where the two factors of messaging and profits collide. If you start out making your stuff in China, you are sending a clear message that the bottom line is an underlying element of your business — it’s important to source ‘cheaper’ than what you can locally and you’ll tolerate all the associated implications. In this instance you tailor a message that is about other aspects of what you do and leave the provenance out of the equation — you won’t hide it but you won’t shine a light on it either. There’s nothing at all wrong with this and if you are on the ball, there will be absolutely nothing wrong with the product you are offering. What you can’t do is start at the opposite end of this strategy, then suddenly switch while still trying to give the impression you are all about X, Y and Z; the ‘made in’ tag tells a different story. In today’s market, it’s one or the other and the educated customer can work this out pretty quickly.
As they say, people can smell a rat. When they do, they will abandon you or worse, rail you on public forums because they have felt they have been led on.